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SNB warns AI could lift inflation in the short term
The Swiss National Bank said AI-driven supply bottlenecks, such as chip shortages, could raise prices, even as longer-term productivity gains may lower costs.
Swiss National Bank governing board member Petra Tschudin said artificial intelligence could push inflation higher in the short term, though its overall impact on prices remains uncertain, according to an interview published Friday by Finanz und Wirtschaft and carried by Reuters. Tschudin said investment flows may be redirected in ways that create adjustments for other parts of the economy. She added that shortages could emerge, for example in chip supply, which would translate into upward price pressure in the short or medium term.
She also noted that over the longer run, AI could potentially reduce prices by boosting productivity and lowering the cost of goods. However, Tschudin said an annual inflation measure would require repeated declines for any deflationary effect to show up consistently, and she argued productivity gains alone are not typically enough to drive structural deflation.
Reuters further reported that the SNB’s latest forecast keeps inflation within its 0% to 2% target range through the first quarter of 2029. Still, Tschudin cautioned that the forecast is conditional on rates staying unchanged and does not indicate policy will necessarily hold, saying the central bank will adjust if new inflation-relevant information appears.